2005 Performance Report OS February 28, 2006 ITEM NO. 6b Supp-1 DATE OF MEETING 2/28/06.
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Transcript of 2005 Performance Report OS February 28, 2006 ITEM NO. 6b Supp-1 DATE OF MEETING 2/28/06.
2005
Performance Report
February 28, 2006
ITEM NO. 6b Supp-1
DATE OF MEETING 2/28/06
Port of Seattle Year End Results 2005 2
Port Wide Financial Results
$0
$50,000
$100,000
$150,000
$200,000
$250,000
$300,000
$350,000
$400,000
$450,000
1998 1999 2000 2001 2002 2003 2004 2005
$ in
000
's Revenues
Expenses
NOI Before Depreciation
Port of Seattle Year End Results 2005 3
Port Wide Income Results($ in Millions) 2004
Actual2005
Budget2005
Actual
05 Actual - Budget Var. %
05 Actual - 04 Actual
Var. %
Operating Revenues $376.6 $402.5 $406.0 0.9% 7.8%
Operating & Maint. Expenses 223.3 213.8 213.1 0.3% -4.6%
Net Operating Income 153.3 188.7 192.9 2.2% 25.8%
Depreciation Expense 110.2 102.5 133.7 -30.4% 21.3%
NOI after Depreciation 43.1 86.2 59.2 -31.3% 37.4%Net Non-operating Income (Expense) 68.3 100.0 77.0 (23.0) -23.0%
Port of Seattle Year End Results 2005 4
Port Wide2005 Capital Spending
Division Q1 Q2 Q3 Q4
Year-to-Date
Actual BudgetPlan of Finance
Aviation 95.8 106.8 127.4 83.3 $413.3 $484.0 $594.2Seaport 13.0 19.4 24.9 30.2 $87.5 72.0 74.8Econ Dev 1.1 6.4 0.9 0.3 $8.7 1.8 1.5Corporate 0.8 0.8 1.3 1.7 $4.6 13.4 11.0
Total $110.7 $133.4 $154.5 $115.5 $514.1 $571.2 $681.5
2005Performance Report
Aviation Division
Port of Seattle Year End Results 2005 6
Aviation Business Highlights• Passenger level hit 29.3 million, +1.7% over 2004
– Landed weight down 3.6%; equals 88% of 2000– Operations down 4.9%; equals 77% of 2000– Load factor at 79.1% vs. 75% in 2004
• Non-aeronautical NOI +$18.3M vs. 2004• Reduced Airline costs
– Cost per enplanement (CPE) $11.10 vs. $11.45 in budget– Revenue sharing: $23.6 million, up $5.9 million over 2004– Reduced forecasted 2009 CPE to $14.15
• Reached agreement on new 7-year airline agreement• Major project milestones:
– Opened CTE– Third Runway Project on schedule and budget
Port of Seattle Year End Results 2005 7
Goals & Strategic Issues Progress
• Develop and Maintain Community Support– Completed ILA negotiations with city of SeaTac– Modified 55-acre development agreement with city
of SeaTac– Established ILA with City of Des Moines– Regular meetings of Highline Forum
• Extraordinary NW Customer Experience– Opened Central Terminal– Enhanced international arrivals assistance– Relocated hourly parking in garage– Installed new airport directories
Port of Seattle Year End Results 2005 8
Goals & Strategic Issues Progress
• High Density Development– Phase I Program on schedule; 79% completion– Refined Comprehensive Development Program
and completed environmental process– Completed funding strategy for SR518 3rd lane– Established effective design and construction
collaboration with Sound Transit– Restarted rental car facility project– Delays in completion of baggage systems
• C-60 is 85% complete (goal was 100%)• C-1 is 49% complete (goal was 60%)
Port of Seattle Year End Results 2005 9
Goals & Strategic Issues Progress
• High Performance Workplace– Implemented employee development initiative
focused on enhanced job proficiency and succession preparation
• Special assignment pilot completed• Development planning education completed
– Diversity awareness milestones completed– Eliminated backlog of labor contract negotiations– Continued labor relations education series:
• 9 labor relations sessions attended by 227 employees• 9 collective bargaining sessions attended by 127
– Workplace Safety: achieved lowest incident rate and lost work days since measurements began
Port of Seattle Year End Results 2005 10
Goals & Strategic Issues Progress
• Maximize Financial Performance– Airline CPE - 3.1% under budget– Non-airline revenues per enplanement – exceeded
budget by 6%– Opened new concessions in Central Terminal– Implemented new financing strategy:
• New intermediate lien:– Lower debt service coverage – Structure facilitates PFC offset
• Increased liquidity level
Port of Seattle Year End Results 2005 11
Enplanements 2000-2005
14,174
13,506
13,362 13,356
14,364
14,632
12,600
12,800
13,000
13,200
13,400
13,600
13,800
14,000
14,200
14,400
14,600
14,800
2000 2001 2002 2003 2004 2005
Enplanements (000's)
2005 is 1.9% above 20042005 is 3.2% above 2000
Port of Seattle Year End Results 2005 12
Aviation Q4 Operating Results$ in '000 2004 2005 2005
Actual Actual Budget Var $ Var %
Revenues Total Airline Revenues 150,640 165,927 173,059 (7,131) -4.1%
Public Parking 42,037 45,782 43,446 2,336 5.4%Rental Cars 25,818 32,353 30,859 1,494 4.8%Concessions 21,022 26,232 26,399 (167) -0.6%Other 26,175 29,733 26,976 2,756 10.2% Total Non-airline Revenues 115,052 134,099 127,680 6,419 5.0%
Security Grants & Fuel Hydrant 2,107 4,894 5,244 (351) -6.7%
Total Revenues 267,798 304,920 305,983 (1,063) -0.3%
ExpensesAirport Expenses 102,020 108,825 108,290 (536) -0.5%Corporate Expenses 26,012 26,020 24,844 (1,176) -4.7%Police Costs 13,784 13,987 14,085 97 0.7% Total Operating Expenses 141,817 148,833 147,218 (1,615) -1.1%
Net Operating Income 125,982 156,087 158,765 (2,678) -1.7%
Actual/Budget
Port of Seattle Year End Results 2005 13
Aviation Key Indicators2004 2005 2005
Actual Actual Budget Var $ Var %
Non-Aero Financial PerformanceRevenues 115,052 134,099 127,680 6,419 5.0%Operating Expenses 39,440 40,172 42,565 2,392 5.6%NOI 75,612 93,927 85,116 8,908 10.5%
Airport Vitality Measures Operating Cost / Enpl 9.87 10.17 9.96 (0.21) -2.1% Non-Airline Revenues / Enpl 8.01 9.16 8.64 0.53 6.1% Passenger Airline CPE 10.26 11.10 11.45 0.35 3.1%
Other Key MeasuresLanding Fee Rate 2.17 2.33 2.50 0.16 6.5%
Non-Airline Revenue / Total Rev 43.0% 44.0% 41.7% 2.3% 5.4% Parking Revenue / Enpl 2.93 3.19 3.02 0.16 5.4% Concessions Revenue / Enpl 1.46 1.79 1.79 0.01 0.4% Primary Concession Sales / Enpl 6.92 7.75 7.45 0.30 4.0%
Traffic Enplanements 14,364 14,632 14,781 (149) -1.0%Landed Weight (BALA for '03) 20,944 20,186 21,537 (1,351) -6.3%
Airline Surplus/DeficitLanding Fees (1,245) 1,815 0 1,815 n/aTerminal Rents (20,316) (4,907) 0 (4,907) n/aRevenue Sharing 17,716 23,558 18,161 5,398 30%Net Surplus/Deficit (3,845) 20,467 18,161 2,306 12.7%
Actual/Budget
Port of Seattle Year End Results 2005 14
Aviation Expense Variance Drivers
Description ($ in '000s) Amount
Total operating expense variance ($1,615)
Major VariancesEarthquake Receivable Write-off (2,096) Capital Project Write-offs (1,459) Environmental Reserve (269) Janitorial Costs (1,119) ICT Charges (1,200) Total (6,143)
Other Net Savings $4,528
Port of Seattle Year End Results 2005 15
Capital Spending 1999-2005$ in millions
$229$272
$359$364 $421 $417 $413
$484
$0
$100
$200
$300
$400
$500
$600
1999 2000 2001 2002 2003 2004 2005 Act 2005 Bud
Port of Seattle Year End Results 2005 16
Aviation Capital Budget
Sponsor ($ in '000s)
2005 Plan of Finance
2005 Annual Approved
Budget2005
Actuals
Variance Actuals to
Budget
Airfield 50,356 25,058 23,545 1,513
Division Wide 13,295 14,220 9,824 4,396
Business Development 9,533 7,774 10,141 (2,367)
Infrastructure 43,478 42,064 35,031 7,033
Landside 25,283 15,590 8,318 7,272
Noise Program 44,189 48,538 20,757 27,781
Security 111,746 66,961 61,581 5,380
Stormwater 26,800 12,150 10,599 1,551
Terminal & Tenants 63,986 98,800 71,123 27,677
Third Runway 205,544 152,581 162,342 (9,761)
Totals 594,210 483,736 413,261 70,475
Percentage of Budget 85%
2005
Performance Report
Seaport Division
Seaport Division
Overview
2002 - 2005
Port of Seattle Year End Results 2005 19
Seaport in 2002
• NOI in 2002 was $13.2M• Container volume flat at 1.439M TEU’s (3 year
avg annual growth rate negative (1.2)%)• Nearly 200 vacant acres
– Consolidation in containers – SE harbor vacant– Car Shipper (DAS) and Hasbro departure– Rainier Cold Storage earthquake damage
• Cruise 1 berth, 3 homeport ships and 245,000 passengers
• Impacts of 9/11 and Nisqually earthquake• Set a goal of reaching $34M NOI by 2005
Port of Seattle Year End Results 2005 20
Lease of Vacant Acres2003-2005
• T46 – Completed TTI/Hanjin Expansion 18 acres • T30 – 2 berth cruise facility 25 acres• T25/28 – Redevelop into container facility for SSAT
32 Acres• T25 – SCS Refrigerated Services, LLC 15 Acres• T106 – Container storage yard for SSAT 15 Acres• T5 – Use of option area by Eagle Marine 19 Acres
(month to month)• T91 – Carnitech facility 2 Acres• T115 – 30 Year Lease with Northland (property was
occupied by other tenants prior to this transaction)
Port of Seattle Year End Results 2005 21
Seaport 2002-2005
• 2005 container volume at 2.088M TEU’s (3 year avg annual growth rate of 13.2%)
• Leased 126 Acres to maritime and industrial tenants
• Cruise 3 berths, 8 homeport ships and 687,000 passengers
Port of Seattle Year End Results 2005 22
Seaport 2002-2005
• Carried out key transportation and environmental initiatives
• Reduced expenses
• Staff reduced from 217 to 169 not including warehouse
• NOI in 2005 is $40.4M: 18.8% above goal and 3 times 2002 NOI
2005
Performance Report
Port of Seattle Year End Results 2005 24
Seaport Business Goals
Provide Compelling Value and Asset Utilization
• TEU’s: Up 17.6% over 2004 to 2.088 million. Full inbound up 19.2% and full outbound up 22.1%.
• Grain: Up 30% over 2004 to 5.0 million metric tons.
• Cruise:169 calls and 687,000 passengers.
Port of Seattle Year End Results 2005 25
Seaport Business Goals
Provide Compelling Value and Asset Utilization• Vacant Property: 14 additional acres leased. • Occupancy Rates: commercial property at 91%
occupancy, below target of 96% but above market average of 81%. Industrial buildings and warehouses occupancy 91%, market 96%.
• Marina Occupancy: two of five marinas exceeded occupancy targets: SBM 93% vs. goal 90%; FT 89% vs. goal 85%; HIM 98% vs. goal 99%; BHM 80% vs. goal 90%; MIC 73% vs. goal 80%.
Port of Seattle Year End Results 2005 26
Seaport Community Goals
• Relationships: 36 speaking engagements. No regulatory violations. Air emissions inventory 12/06.
• Regional Transportation: Viaduct south end design better accommodating T-46 access. 519 discussions restarted. East Marginal Way work on track: design progressing, offers made to property owners, detailed MOA with City in progress.
• Security: 98% of the tasks identified in 2004 have been completed. Projects on track.
• High Performance: 48% of performance reviews completed one week prior to anniversary date, 61% completed by anniversary date. Safety index at 98.6% as of Q3.
Seaport Division Operating Results
($ in Millions)2004
Actual2005
Budget2005
Actual
2005 $ Budget
Var.Operating Revenue $85.3 $88.0 $95.2 $7.2Security Revenue 23.2 8.3 5.4 (2.9)Total Operating Revenues 108.5 96.3 100.7 4.4Seaport Operating Expense 39.8 39.4 36.8 2.6Security Expense 23.7 9.0 6.5 2.5Environmental Reserve 2.2 1.1 3.7 (2.6)Corporate Allocations 12.0 12.7 13.3 (0.6)Total Expenses 77.7 62.2 60.3 1.9Net Operating Income 30.8 34.1 40.4 6.3
Seaport Division Key VariancesRevenue Detail ($’s in Millions)
Business Unit - Revenue
Variance to Budget B(W)
Containers $3.7
Docks $3.0
Cruise $.7
Harbor Services $.4
Real Estate $(.6)
Security $(2.8)
Total $4.4
Seaport Division Key VariancesExpense Detail ($’s in Millions)
Expense Variance to Budget B(W)
Security – offset by revenues $2.2
Unemployment Reserves $1.2
Environmental Reserve $(2.6)
Maintenance $(.7)
Utilities $.5
All Other $1.3
Total Expense $1.9
Port of Seattle Year End Results 2005 30
Seaport Business GroupsNOI Before Depreciation ($’s in Millions)
Actual NOI
Variance to Budget B(W)
Cargo and Cruise $37.4 $8.4
Harbor Services $1.8 $.7
Real Estate $2.5 $(2.2)
Security $(1.3) $(.6)
Total Seaport $40.4 $6.3
Port of Seattle Year End Results 2005 31
Seaport Capital 2005$’s in Millions
Plan of Finance
Approved Budget
Actual Variance to
Budget
Act. as % of App. Budget
$74.8 $72.0 $87.6 $(15.6) 122%
Port of Seattle Year End Results 2005 32
Seaport Capital Projects 2005
Spending was 122% of the approved budget for the year.
Projects not in Plan of Finance were authorized by Commission:– Terminal 25 development for Matson $15 million.– Terminal 91 Berth C&D and utility upgrade planning $8 million.
Shilshole Bay Marina spending was $13 million in excess of Approved Budget. Approved Budget was not adjusted to reflect shorter project time frame. Actual spending in line with Plan of Finance.
Projects less than Approved Budget due to delays:– Terminal 5 Admin Building delayed due to weather $2.6 million.– Terminal 115 Dock Reconstruction was delayed due to permitting issues $5
million.– Security due to delays on Round II projects for Tacoma and Everett, $4.3 million
below budget.
Port of Seattle Year End Results 2005 33
Seaport Recent Results
• NOI $40.4M exceeding $34M NOI target and triple 2002 NOI.
• 17.6% Container growth in 2005.• 22% growth in Cruise passengers in 2005.• Grain volumes up 30% over 2004.• Aggressive capital project milestones met. • Commercial building occupancy at 92%.• Received Envirostar awards at 3 Marinas and
Maintenance.
Seaport Division OverviewExcluding Security Grants ($’s in Millions)
100
88
8385
95
7775
61
55 55
23
13
23
31
40
0
20
40
60
80
100
120
2001 2002 2003 2004 2005
Seaport Revenue Total Expense Seaport NOI Before Depreciation
2005
Performance Report
2005 Fourth QuarterPerformance Report
Economic Development Division
Port of Seattle Year End Results 2005 37
Economic Development DivisionToday’s Presentation
Introduction
Business Goals, Progress & Highlights for:– Real Estate Development– Regional Transportation– Economic, Business and Trade Development
2005 Operating Results
2005 Capital Program & Results
Port of Seattle Year End Results 2005 38
Real Estate Development2005 Business Goals
1) Advance the planning and development of certain assets the Port currently owns (e.g. North Bay)
2) Identify and respond to new opportunities and projects
3) Seek to establish a center of expertise within the Port for real estate planning and development
Create regional economic vitality through three real estate-related initiatives:
Port of Seattle Year End Results 2005 39
Real Estate DevelopmentProgress & Business Highlights
– North Bay Project• Selected preferred development alternative• Published final Environmental Impact Statement• Integrated planning with Pier 91 improvements • Continued outreach to community• Acquired Tsubota Steel site
Port of Seattle Year End Results 2005 40
Real Estate DevelopmentProgress & Business Highlights
Central Waterfront Concept Plan• Participated in Waterfront Partners Group
Colman Dock Expansion• Monitored planning efforts by WSDOT and City of
Seattle• Appraising Pier 48
Waterfront Streetcar Extension• Completed joint feasibility study
Port of Seattle Year End Results 2005 41
Regional Transportation2005 Business Goals
Be a Catalyst for Regional Transportation Solutions
1) Ensure access to existing and future Port facilities
2) Enhance freight mobility
3) Promote regional economic competitiveness
Port of Seattle Year End Results 2005 42
Regional TransportationProgress & Business Highlights
– Project Planning & Activities:• Viaduct/Seawall Replacement• SR518• East Marginal Way, South Downtown Rail
Corridor/SR519• Magnolia Bridge, Mercer Corridor
– Defeat of I-912 maintained state funding– Developed federal and state 2006
legislative strategies
Port of Seattle Year End Results 2005 43
Economic, Business & Trade DevelopmentBusiness Goals
Create regional economic vitality by proactively seeking international and regional trade related opportunities
1) Regional Economic Development
2) International Trade & Business Development
3) New Business Opportunities
Port of Seattle Year End Results 2005 44
Economic, Business & Trade Development
Progress & Business Highlights
Regional Economic Development• Formulation and implementation of Prosperity
Partnership’s “Regional Economic Development Strategies for Central Puget Sound”
• Action Strategy Groups
International Trade and Business Development• Port Asia Offices (Japan, South Korea, Shanghai, Hong
Kong and Singapore)• Strategy for identifying trade leads and Foreign Direct
Investment leads, and• Transportation and Logistics intelligence gathering and
interpretation• China Initiative
Port of Seattle Year End Results 2005 45
Economic, Business & Trade Development
Progress & Business Highlights
Developing New Business Opportunities• Inland Northwest Project
• Cruise business MOU with Shanghai Int’l Ports Group
• Foreign Manufacturing Company site selection
Port of Seattle Year End Results 2005 46
Economic Development DivisionOperating Results
2004 2005 2005 Bud Var
Actual Actual Budget $ %
Expenses:
Direct Op & Maint Exp $ 2,872 2,408 3,012 604 20.1%
Divisional Allocations 0 21 0 (21)
Corporate Allocations 541 511 488 (23) 4.7%
Total Expenses 3,413 2,940 3,500 560 16.0%
NOI Before Depreciation (3,413) (2,940) (3,500) 303 -16.0%
Depreciation 93 108 72 (36) -49.0%
NOI After Depreciation (3,506) (3,048) (3,572) 524 -14.7%
Port of Seattle Year End Results 2005 47
Capital Program 2005SR 518
("Gov't Expense" Project)
North Bay Tsubota Total R.E. Reg. Trans.
2005 Plan of Finance 1.5 0.0 1.5
2005 Approved Budget 1.8 0.0 1.82005 Actuals 2.5 6.1 8.6Variance (0.7) (6.1) (6.8)
Authorization 7.3 6.1 13.4 5.0
2005 Spending 2.5 6.1 8.6 1.7Previous Spending 4.0 0.0 4.0 0.0Total Spending 6.5 6.1 12.6 1.7
Remaining Budget 0.8 0.0 0.8 3.3
2005
Performance ReportCorporate Professional &
Technical Services
Port of Seattle Year End Results 2005 49
Corporate Highlights• Corporate performance for the year 2005 was
$3.7 million or 6.3% unfavorable compared to the approved budget.– $1.9 million for ICT restructuring & Systems
Remediation– $1.9 million in environmental reserves
• Commission meetings accessible via web-site• Environmental Services reached agreement on
air emissions inventory• ICT completed restructuring
Port of Seattle Year End Results 2005 50
Corporate Indicators• Workers Compensation costs decreased 19%• 1019 employees participated in learning calendar
classes• Processed 7,256 employment applications
compared to 5,155 for 2004, up 40%• Electrical consumption decreased by 11%• Saved $6,684,763 PV (9.97%) on bond
Refunding
Port of Seattle Year End Results 2005 51
Corporate Professional and Technical Services Operating Results
2004 YTD 2005 YTD 2005 Bud Var.In $ Thousands Actual Actual Budget $ %
Revenues 1,624 1,647 1,694 (47) -2.8%
Executive 1,550 1,643 1,648 5 0.3%Commission 473 462 495 34 6.8%Legal 11,314 12,084 10,180 (1,904) -18.7%Public Affairs 3,231 3,940 3,807 (134) -3.5%Government Relations 808 859 876 17 2.0%Engineering 814 726 1,127 400 35.5%Port Construction Services 1,843 1,840 1,304 (535) -41.0%Human Resources & Dev. 2,836 3,006 3,203 196 6.1%Labor Relations 533 581 647 66 10.2%Information & Communications Technology 10,559 10,957 9,089 (1,868) -20.5%Finance & Budget 1,314 1,181 1,249 68 5.4%Accounting & Procurement Svcs. 4,223 4,939 4,959 20 0.4%Facilities Management 1,995 1,775 1,739 (36) -2.1%Police 16,829 17,407 17,388 (19) -0.1%Contingency 504 486 500 14 2.9% Total 58,827 61,886 58,212 (3,674) -6.3%
Port of Seattle Year End Results 2005 52
Small Business Initiative Highlights
• May 2003 Port Commission adopted the Small Business Initiative
• Small Business Roster (SBR) developed for easy access to register with the Port as qualified small business
• Port set a 10% target for purchases of Goods and services from qualified small business
• Regional Contracting Forum: The Port was one of the lead agencies in planning and organizing of this forum
• Northwest Minority Showcase: The port hosted a booth in which major corporations, minority business, and public agencies from across the country came to develop business relationships and attend workshops
Port of Seattle Year End Results 2005 53
Small Business Initiative
Year 2003 Year 2004 Year 2005Total Total Total Total Total Total
Organization Eligible Dollars % Eligible Dollars % Eligible Dollars % Aviation 99,654 5,484 5.50% 92,579 5,291 5.71% 86,619 4,799 5.54%
Seaport 34,464 2,082 6.04% 11,355 1,152 10.15% 14,572 2,298 15.77%
Corporate 49,620 4,845 9.76% 35,468 4,365 12.31% 45,311 3,607 7.96%
Econ & Trade 1,261 138 10.97% 3,066 383 12.51% 2,457 637 25.91%
POS Total 184,999 12,550 6.78% 142,468 11,191 7.86% 148,959 11,340 7.61%
2005
Performance Report